Which One of the Following Equations Represents Retained Earnings Activity

question 85

Multiple Choice

Which one of the following equations represents retained earnings activity for a year?

• A)Beginning balance + expenses - dividends = ending balance.
• B)Beginning balance + cash receipts - cash payments = ending balance.
• C)Beginning balance + dividends - net income = ending balance.
• D)Beginning balance + net income - dividends = ending balance.

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Definitions:

Uncompensated Cost

Costs that occur when an action has effects, positive or negative, on third parties without those parties being compensated.

Social Cost

The total cost of an activity, including both private costs borne by the producer and external costs suffered by others.

External Costs

Costs incurred by someone who does not participate directly in a transaction or activity, often relating to environmental or societal impacts.

Socially Optimal

A condition or point at which the total benefits to society are maximized, often considered in the context of production or distribution of goods and services.